This might have something to recommend it as part of a comprehensive tax reform, such as the cash-flow tax many economists have proposed to replace the corporate income tax. Faster productivity growth will require much higher rates of capital investment — higher than Canada’s meagre supply of domestic savings can support. Hence the need to keep Canada’s tax rates competitive, to ensure the country remains attractive to footloose international capital. Broad-based tax reform is less likely to be perceived as unfair, and creates winners as well as losers. But what if the carbon tax was implemented in tandem with broad-based tax reform?

Source: National Post October 16, 2018 00:34 UTC